KUALA LUMPUR: Tan Chong Motor Holdings Bhd faced continued financial challenges in the first half of FY24 (1H FY24), with low group sales volume and narrowing margins, further strained by weakened local currencies.
However, Hong Leong Investment Bank Bhd (HLIB) expects a recovery in the second half of FY24, supported by the launch of new Nissan e-Power models, the commencement of GAC Motor International Co Ltd's distribution in Vietnam, and the strengthening of the ringgit.
"The expected launch of new e-POWER Nissan Kicks in the fourth quarter (Q4) FY24 and new GAC models in Vietnam are expected to improve the group's sales volume from 2025 onwards," it said.
Meanwhile, HLIB said Myanmar market environment has been improving with small profits due to tight cost control measure in place, while demand and supply have
been gradually improving.
However, the bank said Laos and Cambodia markets remain weak due to deteriorated consumer sentiment.
"The recent launch of e-POWER Nissan X-trail model in Laos and the inventory replenishment of Nissan Navara model in Cambodia are expected to offer some reprieve.
"The group is expected to benefit from the recent share appreciation of ringgit vs US Dollar."
The firm has maintained its 'Sell' recommendation on Tan Chong with an unchanged target price of 65 sen.